Subex restructures FCCBs, part of bonds to be converted to shares

BANGALORE: IT firm Subex has completed a re-structuring its dollar convertible bonds with a substantial majority of bondholders agreeing to an exchange offer involving issue of new bonds with mandatory conversion component and an extension of the maturity period of the unexchanged bonds.

The company has issued new secured bonds worth about $127 million with a maturity period to July 2017 and a conversion price of Rs 22.79 per share.

They will carry an interest rate of 5.70%. Of this, bonds worth about $36 million will mandatorily be converted into shares at the conversion price of Rs.22.79.

The shareholding of the promoters, Subash Menon and his family, could come down to about 6% after the conversion, a company official told ET. The maturity period of the un-exchanged existing bonds, worth $ 3.4 million, has been extended to March 2017.

Mr Menon has resigned as chairman of the company but will continue as managing director, the company said in a notice to the stock exchange. Two additonal directors, Surjeet Singh, the CFO of the erstwhile Patni Computer, now called iGate, and Karthikeyan Muthuswamy, are joining the board as nominee directors of the bond holders.

Subex had issued foreign currency convertible bonds of $ 180 milion in 2007. In 2009, it had re-structured them with a lower conversion price of Rs 80 a share compared to the original bonds, which had conversion price of Rs 656 per share.